As the rhetoric around trade continues to deteriorate and the incidence of name calling rises, it is getting harder and harder to discuss global trade and monetary conditions dispassionately and objectively. This should not come as a surprise, and is something I have been “predicting” for several years as part of the standard package of events that …
Read More…Archive for January, 2009
Perhaps canceling purchases of the Financial Times won't be enough
On my flight back to Beijing last night I noticed an article in the Financial Times in which Miguel Sebastián, Spain’s industry minister and someone hotly tipped for finance minister, called on Spanish households to stop buying foreign goods and to buy more Spanish goods. “Right now,” he said, “there is something that our …
Read More…There are monetary echoes from the 1930s too
I have been on the road for the past few (and next ten) days, in part because of Spring Festival, so I haven’t been able to post as much as I normally do, but I was asked to write an article for a Chinese magazine, which I recently finished, on comparisons between today and the …
Read More…Monetary conditions might exacerbate the Chinese adjustment
I think if I were an economic policymaker in China I would be spending most of my time thinking about the money supply and how it works. There is a small but growing possibility that Chinese monetary conditions are going to go wrong at exactly the wrong time, and policymakers will need to have a …
Read More…Is the US trade deficit sustainable? Is China’s trade surplus?
China’s December trade figures came out and, following November’s lead, everything is moving in the wrong direction. Exports were down 2.8% (versus up 21.7% in December 2007) which although bad at least is better than the average forecast of over 4%. Within overall trade exports to Europe were down 3.5% and to the US 4.1%. …
Read More…As deficit countries contract, can surplus countries be far behind?
The US loses the most jobs since 1945, the Financial Times headline blared out yesterday. According to the article: The US economy lost more than half a million jobs in December for the second month running, figures showed on Friday, making 2008 the worst year for job losses since 1945 and intensifying pressure on Congress …
Read More…The fun part – assigning blame
The piece I wrote for YaleGlobalOnline, which I mentioned in my last entry, was published today, and is called “US and China Must Tame Imbalances Together.” In the article I try to argue that the roots of the current financial imbalance – or, more accurately, of the latest and strongest stage of the current financial …
Read More…Chinese manufacturing numbers reinforce the pessimist’s outlook
There is some good news about Chinese retail sales, although I am not sure how useful it is because retail sales numbers in China have always been a little hard to reconcile with other indicators of domestic demand. According to an article in today’s Bloomberg: Retail sales in China rose 13 percent during the three-day …
Read More…The Ox approaches
It is becoming easier and easier to find signs of trade tensions and potential for friction. On Tuesday’s post I already mentioned the fact that South Korea had shifted from deficits to surpluses, and that Vietnam had devalued the dong as a reaction to falling exports. Yesterday’s Financial Times has the kind of article I …
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